You’re a proactive planner, so you applied for small business insurance quotes. Fantastic! You spy a few quotes for Professional Liability Insurance, but you’re a little unclear on what this policy is about.
Instead of swimming through paragraphs of insurance jargon, you have a great resource just one click or phone call away: your insurance agent. They know the ins and outs of the insurance biz and can help you make sense of the policy. But where do you start? With all the questions you have, it can be difficult to prioritize them.
Get the Conversation Going: 5 Starter Questions about Professional Liability Insurance
If you’re ready to learn more about Professional Liability Insurance (aka Errors & Omissions Insurance) from your insurance broker, prepare a list of questions in advance. Writing out your questions ahead of time ensures you don’t leave anything out. That said, here are five questions you might want to ask your agent about your policy.
- Is this a claims-made policy? Most E&O policies offer this type of coverage, which means your policy must be active both when the alleged incident happened and when the claim is filed to receive your benefits. It’s especially important to ask this if you’re changing insurers because you don't want to have gaps in your coverage.
- Does it have a retroactive date? First, what’s a retroactive date? For claims-made coverage, a retro date acts as a cut-off point for coverage. In other words, any incident that took place before the retroactive date is not covered, even if you file the Claim during your policy period. So, if someone files suit against you for a mistake that took place before your Professional Liability Insurance policy’s retroactive date, the claim won't be covered even though your policy is active now.
- What are my limits? A policy typically has an “individual limit,” the highest amount that will be paid for any single claim, and an “aggregate limit,” the most that will be paid in a policy year for all claims. Coverage limits vary depending on your industry, business size, and claims history.
- What’s not covered? Professional Liability Insurance offers financial protection for lawsuits (meritless or not) over errors or oversights your business makes while providing professional services. Third-party bodily injuries? Property damage? Workers’ Comp claims? Nope, look elsewhere.
- What are my responsibilities as a policyholder? In order receive all the benefits of your E and O policy, there’s some things you have to do. Pay your premium (usually in monthly or annual installments), choose a deductible you can comfortably afford if you have to make a claim, and use best practices to avoid Professional Liability lawsuits. If you knowingly committed a negligent or illegal act, your policy will likely be invalidated.
Get Expert Advice on Professional Liability Insurance ASAP
While sorting out the nuts and bolts of a Professional Liability Insurance policy, try looking for an insurance agent who specializes in your small business’s field (hint: Insureon’s expert agents). An agent with this kind of experience knows the risks specific to your industry and can offer insight on how to reduce those exposures.
Remember that your insurance agent is your go-to resource for your insurance questions and needs, so put them to work! And most important, be sure you understand your policy before purchasing it.